Rationales for Outsourcing Domestic Services to Off-the-Books Workers

Abstract

Purpose This paper evaluates critically the assumption that the main reason for acquiring domestic services from the off-the-books economy is to save money. Methodology Data is reported from an Internet survey of 5,500 people living in households with one or more members in employment in the city of Sheffield in England, which resulted in 418 responses (a 7.6 per cent response rate). Findings In just 13 per cent of cases where domestic tasks were outsourced to the off-the-books economy was the main reason to save money or cost. Instead, off-the-books workers were used principally due to the problems customers confronted regarding the availability and quality of formal service providers.

Research limitations This survey covers only households with one or more members in employment, a population group previously shown to be more likely to outsource domestic services and use off-the-books workers. It does not cover no-earner households and is not a nationally representative sample.

Practical implications (if applicable) The implication is that using penalties to change the cost/benefit ratio confronting those acquiring domestic services from the off-the-books economy is unlikely to be successful since cost is in most cases not their major rationale. Instead, attention needs to be paid to improving the availability and quality of formal service provision so as to negate the need for customers to outsource to off-the-books workers.

Originality/value of paper Refutes the assumption that goods and services are acquired from the off-the-books economy in order to save money.

Keywords: household services, consumer behaviour, informal sector, underground economy, outsourcing, informal economy, England, economics, off balance sheet finance, service industries

JEL Classification: O17, H26, H31